Sunday, January 27, 2019

Davos crowd and Foxconn crew on the same page when it comes to robots vs humans

The concept of business oligarchs meeting in Davos to discuss strategies is sickening enough to me. But what these people actually talk about may be much worse for most of us.

Kevin Roose went to Davos last week, and what he reported back in the New York Times shouldn't comfort you.
They’ll never admit it in public, but many of your bosses want machines to replace you as soon as possible.

I know this because, for the past week, I’ve been mingling with corporate executives at the World Economic Forum’s annual meeting in Davos. And I’ve noticed that their answers to questions about automation depend very much on who is listening.

In public, many executives wring their hands over the negative consequences that artificial intelligence and automation could have for workers. They take part in panel discussions about building “human-centered A.I.” for the “Fourth Industrial Revolution” — Davos-speak for the corporate adoption of machine learning and other advanced technology — and talk about the need to provide a safety net for people who lose their jobs as a
result of automation.

But in private settings, including meetings with the leaders of the many consulting and technology firms whose pop-up storefronts line the Davos Promenade, these executives tell a different story: They are racing to automate their own work forces to stay ahead of the competition, with little regard for the impact on workers.
And instead of investing in worker training or raising salaries to encourage productivity (which supply-siders insist would be the result of reducing taxes on business owners), Roose mentions that billions of dollars are being spent to develop ways NOT to pay for employees.

And is a certain company that's set to get billions from Wisconsin taxpayers to allegedly create thousands of jobs mentioned in Roose's article? OF COURSE IT IS!
For an unvarnished view of how some American leaders talk about automation in private, you have to listen to their counterparts in Asia, who often make no attempt to hide their aims. Terry Gou, the chairman of the Taiwanese electronics manufacturer Foxconn, has said the company plans to replace 80 percent of its workers with robots in the next five to 10 years. Richard Liu, the founder of the Chinese e-commerce company, said at a business conference last year that “I hope my company would be 100 percent automation someday.”
Yet Wisconsinites and especially people in Racine County are building infrastructure for Foxconn that's supposed to handle thousand of jobs, and gambling that the added employment will lead to other economic growth in the area. That seems increasingly like a losing bet by the day.

And sure, you can say that if Foxconn misses certain employment targets, they won't get job creation credits for that year (like they did this year). But if Foxconn hits the minimum amounts of jobs needed in the 5-10 years Gou says it'll take to get automation underway (a number well below the 13,000 GOP hacks like to throw out), many costs will be sunken. This includes the $1.5 billion they would get up-front from taxpayers to build the plant, and the costs of infrastructure and upgraded highways, which run well north of $1 billion.

The other point to be made here is "How do we deal with all the workers thrown out of jobs by automation and related profit-chasing?" The argument 20 years ago when outsourcing caused major economic problems in America was "well, people will just learn new skills and they'll get paid more, so what's the problem?"

That's not a sufficient answer for a whole lot of people, and it shows in the stagnation of wages that we've seen since the Millennium started, where inflation-adjusted wages in the US didn't change much from 1999-2014.

Sure, the Davos elite and others who are rich and connected enough to insulate themselves from these effects may like the idea of "disruption and automation" (and are certainly happy to exploit the situation with higher profits and stock bubbles). But the overwhelming majority of us sure don't benefit from it. And if we don't install a social system that provides goods and services such as basic health care for all, universal supports and pensions, and a living wage for the work that remains, then the average citizen is going to get even madder and more frustrated than they are today.

And the Davos types should remember what's happened in history when the overwhelming majority of people decide to act on their anger at their lives going into decline while a connected few insiders and decision-makers thrive without accountability to the people they exploit.

I'd say a 70% tax rate on the super-rich and a 50% windfall profits tax on corporations would be a better outcome than that. Don't you?

1 comment:

  1. "I'd say a 70% tax rate on the super-rich and a 50% windfall profits tax on corporations would be a better outcome than that. Don't you?"

    Well, it would be a severe haircut. But it would be better than a headcut. For the 1%, that is. As a 99%er, I'm inclined to favour the headcut, mainly for the entertainment value. Murdochs first in line, ahead of the Waltons!